DNA methylation is required for normal development of higher eukaryotes. Methylation is required for X-inactivation and genomic imprinting in mammals, and abnormal methylation is associated with cancer. In humans, mutation of a DNA methyltransferase (MTase) causes ICF syndrome and mutation of the methyI-DNA binding protein (MBP) MeCP2 causes Rett syndrome. DNA methylation is dispensable in the fungus Neurospora crassa, facilitating genetic studies. Isolation of Neurospora mutants defective in DNA methylation (dim) has led to insights into the control and function of methylation in eukaryotes. Most recently, identification of DIM-5 as a histone H3 MTase demonstrated that histone modifications control DNA methylation. The goal of the proposed research is to elucidate the mechanism of DNA methylation in eukaryotes by taking advantage of this outstanding model system. The work will be facilitated by valuable new resources and tools including: 1. the nearly complete sequence of the Neurospora genome, 2. A novel quelling-based system to recognize DNA methylation defects, 3. a mutagenic process, RIP (repeat-induced point mutation), for reverse-genetics, 4. antibodies specific for modified histones and 5. powerful new analytical methods (e.g., mass spectrometry and microarray analysis). Specific aims of the project are: 1. To identify and genetically characterize proteins that bind methylated and RIP-mutated DNA (MRBP-1, MBP-2, MBP-3); 2. To characterize the DIM-2 DNA MTase, which is responsible for all detected methylation in vegetative cells, and the potential DNA MTase RID, which is required for RIP in sexual cells; 3. To carry out mutational analyses of the N-terminal tails of histones H4, H3, H2B and H2A to assess their role in DNA methylation in vivo; 4. To determine the role of histone methylation in DNA methylation; 5. To elucidate the role of histone acetylation and phosphorylation in DNA methylation; 6. To test the possible role of chromatin remodeling in DNA methylation; 7. To identify additional components of the DNA methvlation machinery.